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Does the Deficit Matter?

ByRichard Baehr
Barack Obama signaled to the ECNPC (the ever compliant national press corps) last week, that they should make a big deal of his proposed $17 billion in spending cuts for the 2010 fiscal year, many of which (40%) were originally proposed by George Bush a year ago and not accepted by the Democratic controlled Congress at that time.

Today comes word that the new estimate for the deficit for 2009 is about $100 billion higher than thought just a month ago (and that incremental deficit, more than 5 times the size of Obama’s proposed cuts, will be run up just in the remaining five months of the fiscal year).

The 2010 deficit number has also been revised — also likely higher by nearly $100 billion. Expect more increments to this number as the year goes on.

One thing we can count on is that every estimate from the Administration proves to be optimistic and self serving (e.g. the $7 trillion ten year accumulated deficit, that the non-partisan Congressional Budget Office estimated at $9.3 trillion, or a third higher than the Obama budget team estimate). The new estimates are for a deficit of over $1.8 trillion for fiscal 2009, and what the New York Times will likely call a “greatly reduced” deficit of just under $1.3 trillion next year.

For fiscal 2009, federal spending of about 3.5 trillion will be supported 54% by collected tax revenues, and the rest (near half) by debt. That has never happened before in this country’s history — neither the size of the deficit (the 2009 deficit is 4 times as large as 2008’s prior record deficit of 450 billion, and the 2010 deficit is 3 times as large as that of 2008) nor the record share of the deficit ( near 50%) that needs to be financed by debt.

What do you call a country whose government is half supported by debt, much of it foreign? Probably one that the International Monetary Fund would consider a basket case that needed to be put on an expenditure diet. The words “banana republic” and “Argentina” come to mind.

We know that the Obama administration’s answer to the puzzle about why the deficit is so large: taxes are too low. It explains why a few times each week, it seems, the Treasury Department introduces a new initiative designed to close some “loophole” for corporations or wealthy Americans, the two principal whipping boys for this Administration.

Obviously, every dollar the Administration wants to spend ($3.6 trillion next year) is believed to be essential, except for the 17 billion proposed to be cut (less than one half of one per cent of total spending). The government’s financial picture at the moment, were it a family or a corporation, would be unsustainable, and laughable. But the Obama administration and the ECNPC, will tell us (or try to sell us) that we have entered a new age of responsibility where we are taking on the big problems where we need to spend more- health care, energy, education.

Paul Krugman, one of the Administration’s favorite economists, is encouraging even more stimulus spending on top of the $787 billion already signed into law by President Obama.

Are Americans so foolish that they do not understand that their government cannot spend twice what it “earns”?

Will Americans at some point catch on that foreign nations may not support our reckless spending forever, and it will have to come from greatly increased taxes — not just on the heavily demagogued high income share of the population (fewer than 3%), but mostly from the middle class?

Will people understand that to attract buyers for all this new debt, interest rates for government debt will have to go up, which in turn will raise interest rates for everyone else in the country as well, putting a real damper on future economic growth?

If the Administration were concerned with the deficit, they would delay much of the new spending on new health care initiatives and education programs, and the stimulus bill would have been directed more at economic growth and job creation, and far less at rewarding Democratic Party interest groups.

Were economic growth a real concern, the idea of pushing a multi trillion dollar cap and trade tax on American consumers and businesses would never be considered now, especially with such scant evidence of any man-made global warming actually occurring.

It is hard not to conclude that the primary purpose of economic policy in the current administration is simply to increase the size of the public sector and shrink the private sector. Chris Bowers, a left wing blogger, said it best a month back — that “progressives” should be very pleased with the Obama administration, since in less than three months, they had already increased the government’s share of the economy by more than 3%. Think about that one; the essence of progressive policy is not where government money is spent, or what it achieves, just that more and more (an ever growing share) is spent by government, not the people who support it (they will have less to spend, since it will be taken away in taxes).

For anyone who thinks we are seeing a temporary spending binge due to the recession, and that federal spending will recede over time, maybe they can provide me a list of all the mothballed federal spending programs that the Congress, in particular a Democratic controlled Congress, has ever eliminated in he past. We are entering an ear of greatly increased federal spending, higher taxes, deficits, and interest rates, and slower economic growth. For an administration supposedly concerned with future generations, they are doing their best to ensure that those future generations will have an enormous hole to dig out from.

A real ‘bully pulpit’

Ed Lasky
The Service Employee International Union (SEIU) was among the biggest donors to President Obama’s campaign, contributing $33 million. The union is also consistently among the biggest donors to Democrats in Sacramento and aggressively fought wage cuts during state budget negotiations.

The SEIU, by the way, not only spent 33 million dollars to help propel Obama to the presidency but has also liberally supported Democratic candidates across the nation. But its reach goes beyond this spending. It can supply the free labor that is priceless during a campaign for door to door solicitations, phone banks, and pamphleteering.

The SEIU is one of the most politically astute unions. Its leadership is deeply involved as the key decision-makers – as well as funders – of a powerful-and furtive group of billionaires who call themselves the Democracy Alliance (I have written about them many times) The group includes people such as George Soros and SEIU’s own Anna Burger, who serves as the vice-chairperson of the Democracy Alliance.

Now the SEIU is throwing its weight around in California, getting the Obama Administration to threaten withholding of federal stimulus money unless wage cuts for home health care workers is rescinded.

Officials in the governor’s office say a politically powerful union may have had inappropriate influence over the Obama administration’s decision to withhold billions of dollars in federal stimulus money from California if the state does not reverse a scheduled wage cut for the labor group’s workers.

The officials say they are particularly troubled that the Service Employees International Union, which lobbied the federal government to step in, was included in a conference call in which state and federal officials reviewed the wage cut and the terms of the stimulus package.

California Secretary of Health and Human Services Kim Belshe said she could not recall another instance in which the federal government invited a significant stakeholder group into such government-to-government negotiations.

“The involvement of a stakeholder in this kind of state-federal deliberative process is unusual at best,” she said. “This was really atypical and outside any norm I am familiar with.”

In addition to several state and federal officials, participants in the April 15 conference call included an SEIU associate general counsel in Washington, a lobbyist for SEIU in California and a representative from SEIU’s policy staff in California, according to a list provided by the Schwarzenegger administration

Does anyone have a problem with “pay for play” when it is transacted by a union who intends to force a state to continue paying high wage rates to its members while using its influence with a President to threaten to hurt all the citizens of the state?

Does anyone have a problem with a President who picks and chooses winners depending on whether they supported him during the election, as if he were a corrupt Chicago machine alderman, as opposed to say the President of the United States who is supposed to represent all of us?

Does anyone have a problem with Boss Obama who threatens and extorts to meet his goals (see Chrysler cram down or his comment that he was the only one standing between Wall Street banking execs and the pitchforks). He has expressed his desire not to quell the people’s anger but to “channel it.”

Obama was about “Change” all right; he has turned the Presidency truly into a Bully Pulpit. And He is the Bully.

In Obama White House, nepotism is alive and well

Rick Moran
Barack Obama’s administration is looking more and more like the Chicago Machine all the time. Threatening, bullying, rewarding allies with sweetheart deals, “pay to play” schemes and political hard ball have been on display as the country is waking up to the fact that the way the game is played in the windy city has migrated east to the Potomac.

Now another aspect of this symbiosis is coming to light with this story by Jonathan Martin in Politico that points to simple nepotism – another Chicago machine staple – as a means for Obama to reward those prominent Democrats who were early or important supporters by hiring their relations:

They’re well-known names in Democratic politics – Kerry, Clyburn, Hamilton, Gregoire, Mikva and Emanuel – but have received little attention because they’re not taking jobs in the senior-most ranks of the government. They are:

• Cameron Kerry, the brother of an early Obama backer, Massachusetts Sen. John Kerry, who has been tapped as chief counsel at the Commerce Department.

• Mignon Clyburn, daughter of House Majority Whip Jim Clyburn of South Carolina, who received a coveted appointment to the Federal Communications Commission

• David Hamilton, nephew of former congressman and Democratic elder statesman Lee Hamilton, who was appointed to an appellate judgeship

• Courtney Gregoire, daughter of Washington Gov. Chris Gregoire, who last week was tapped as director of legislative affairs at Commerce

• Laurie Mikva, daughter of legendary former Chicago judge and Congressman Abner Mikva, who was appointed to the board of the Legal Services Corporation, which provides legal aid to low-income people

• And Ezekiel Emanuel, brother of White House chief of staff Rahm Emanuel, who is a special adviser on health care to OMB Director Peter Orszag.

Mikva has long standing Chicago ties and during the campaign, spoke glowingly of Obama’s commitment to the safety and security of Israel.

Yep…welcome to Chicago politics. Lee Hamilton has become one of the closest foreign policy advisers to Barack Obama and the number one adviser regarding Iran, according to David Ignatius, the foreign affairs columnist of the Washington Post . Hamilton vouched for Obama during the campaign, too.

I gues it is all about paying back favors to people who shill – as any good Chicago Machine pol would do.

The Hate Industry: the global spread of swine flu is used for anti-Semitic incitement across the Arab and Muslim world, targeting Jews and Zionists and accusing them of spreading the disease

A pig with text that reads “Good for the Jews”
(from the website of the Muslim Brotherhood, the forerunner of Hamas)

Overview

1. It is a common theme in Arab and Muslim anti-Semitism: Jews and “world Zionism” are blamed for all the woes of our world, including wars, revolutions, murders, and plagues. Such events as the September 11 terrorist attack or the spread of AIDS are blamed on the Jews in order to fan anti-Jewish sentiments and nurture the anti-Semitic myth of the Jews being the root of all evil. Arab and Muslim media has occasionally referred to the Jews as a “black, dirty germ”, “anthrax virus”, and “AIDS-like virus”. For Hamas , Egypt ‘s Muslim Brotherhood, Iran , and Arab cartoonists the spread of swine flu and the panic it caused was an opportunity to associate the disease with Jews and the Zionist movement in order to incite hatred against the Jewish people and the State of Israel. Examples follow.

Hamas

2. On May 6, 2009, the Hamas organ Felesteen published an article titled “Allah’s war against the plunderers… swine flu”.1 “This disease,” says the article, “called swine flu, has attracted worldwide concern. Its very mention causes panic, because it has started to affect dozens of people a day, [even] in the largest country in the modern world [ US ], in nearby countries, and in its Western allies. It is described as being potentially more devastating than an atom bomb. What is striking is that Zionists began spreading the disease in [Western countries]… Those plunderers [i.e., Zionists] have declared war on Allah”.

3. The author, Ka’inat Mahmoud Adwan, a Gaza Strip resident with an M.A. in Islamic Studies, 2 while supposedly relying on the Quran goes into detail about the wars waged by the Jews against Allah: murdering prophets, collecting interest, rescinding all of Allah’s prohibitions (which include drinking wine and eating pork) as well as degrading morals. The author’s conclusion is that Islam and Islam alone is the solution to the world’s social problems.

The anti-Semitic article: “Allah’s war against the plunderers… swine flu”
(Felesteen, May 6, 2009)

The Muslim Brotherhood

4. A video sharing website of the Muslim Brotherhood, an Egyptian movement from which Hamas broke off about two decades ago, published an anti-Semitic video titled “Swine flu or Jew flu” (April 30, 2009). The video attempts to associate swine flu with the Jews, and shows Israel ‘s Foreign Minister Avigdor Lieberman as a pig. 3

The video titled “Swine flu or Jew flu”

Foreign Minister Avigdor Lieberman as a pig with a swastika on his tie

Arab media

5. The Arab media has featured several cartoons associating swine flu with Israel and the Jews:

Titled “Flu in Israel”, this cartoon shows a pig as part of a Star of David (Al-Watan, Qatar, April 30, 2009)

A cartoon from Akhbar al-Arab, published in the UAE, showing a pig wearing
a Star of David and saying “No to the two-state solution” (May 1, 2009)

6. An article by Palestinian writer Sami al-Akhras, which appeared on an Arab website called “Al-Tajdid al-Arabi” (The Arab Innovation) on May 1, 2009, 4 said as follows: “We [Arabs] have no pigs among us except for the Israeli Jews… Their presence carries with it a flu which is more dangerous and powerful than the currently-spreading swine flu, and unfortunately, we have yet to find the serum which would stop the Jewish flu from spreading…”

Iran

7. Iran ‘s Fars News Agency reported on an article published on April 27 by Canadian economist Michel Chossudovsky in the San Francisco Business Times. According to the article, there was a link between the massive publicity of swine flu and commercial interests of the American drug industry. According to Chossudovsky, the media interest in the disease pushed up the value of the big drug companies traded on the stock market. The Canadian economist focused on Gilead Sciences, an American biotech company which developed Tamiflu, a medication for treating the disease. Iran ‘s Fars News Agency reported about the article on the front page, titled: “Behind the scenes of a political flu: the exorbitant profits of swine flu for [Donald] Rumsfeld and Gilead Sciences”. The news agency made sure to emphasize the “Jewish connection” behind the American company. “Gilead”, says the report, “is a Hebrew name associated with a sacred Jewish mountain in the Middle East” ( Fars , May 3).